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Institutional and retail business revenues almost tripled in 2013, profits squeezed by GFT acquisition

GAIN Capital Holdings (NYSE:GCAP) has just released its fourth quarter earnings report and the figures are quite impressive – the company announced its revenue numbers have nicely jumped up by 38% over last quarter to $83 million. The company’s retail business generated $61.4 million which is a whopping almost tripling of last year’s figures. While revenue numbers are sweet, when we get to the bottom line, profits have stalled – the company reports a decrease of almost 10% from Q3 to $4.3 million.

Granted, a big chunk of that is largely thanks to the GAIN Capital’s acquisition of GFT. The company appears to be shifting attention to optimizing costs, as it announced that it is aiming to reduce its operating expenses between $35 and $45 million in 2014.

A factor worth outlining is the growth rate in its institutional business – total revenue has risen almost five times from $3.6 million a year ago to almost $18 million. GAIN Capital’s (NYSE:GCAP) futures business moved marginally higher growing 26% to add another $5.3 million to total revenue numbers. Over the past year revenues from institutional business have almost tripled to total $38.6 million from $13.6 in 2012.

Total retail trading has risen by 70% in 2013 to a total of $508 billion, while institutional clients accounted for $1.1 trillion – more than double over 2012’s $538.4 billion.

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